How would you improve grammarly? Should Google acquire grammarly?

There are two parts to this Google product design question. I can first clarify with the interviewer that I can solve the question one by one.

How would you improve Grammarly ?

To provide context on the tool: Grammarly is a multiplatform product that provides grammar and other English language corrections and contextual improvements on written text to users who need to write a lot as a part of their day to day lives. Grammarly's current monetization model has been subscription business for enterprises (mainly academic institutions) which has now been extended to individual users. Their core product is grammar corrections which are free to all, whereas they extend additional services like contextual alternate word suggestions, formatting, tone corrections, etc., to premium users.

Clarifications on how to improve grammarly ?

Different aspects of performance of grammarly can be below:

Output north star metrics: Monthly revenue (enterprise vs individual), DAU, MAU

Breaking down the metrics:  

• DAU :  % active users / overall user base, % active users moving to less active segment

• MAU : New users, % active users / overall user base, % active users who churn 

Other Product metrics: 

Grammarly's vision would be to facilitate faster and accurate writing - which can be tracked by below metrics -

• % suggestions accepted / rejected by user  (relevance)

• % time saved for user to total writing time / user

Given Grammarly continues to be in growth phase, the improvement suggestion presented could be to increase the DAU, which should naturally facilitate its ambitions of Revenue growth. 

How to improve DAU for Grammarly?

Different segments of Grammarly's users includes below: 

Individuals: 

1. Students: Grammarly is used by students who naturally have heavy writing assignments to both assist in writing

2. Tech working professionals: Working professionals like documentation writers, tech documents, product managers who need to write comprehensive documentation and well-clarified email communications

Enterprises:

1. Academics: Academicians who need to write research topics and also facilitate plagiarism checks

Below are different ways of increasing the DAU user base: 

Suggestion would be to target new user segments by introducing templatization as this is a naturally write heavy segment and has higher DAU/revenue potential.

Should Google acquire grammarly?

I suggest following brief framework for this problem - 

1. What is the purpose of googles core products and does grammarly fit into those products

   1. Purpose

   2. Technology

   3. Platform

   4. Competition

   5. Universality

2. Does grammarly have strengths that is difficult to replicate

Analysis

1. Purpose: Google larger vision > Organize world information for making it instantly accessible >>Google docs / Google chat / emails / Chrome which are write-heavy and facilitate faster & better organizing of thoughts and communication for end users. Grammarly fits into this purpose well and enables end user to organize thoughts and communication better and faster in write mediums like google docs / presentations / emails / chat.

2. Technology: Googles relies on latest technology like AI for search and recommendations. Grammar recommendations are largely deriven by AI this alignts with googles tech culture

3. Platform: Grammaly highest user base is already based on chrome (extension) and plugins for google doc. This aligns well with googles platform.

4. Competition : MS word has a spell checker is the closest competition. Grammarly can complement well for google across its ecosystem

5. Universality: Google is looking to be the universal partner across most internet languations. Grammarly does not support this.

Replicability: Grammarly has been built with years of auto learning based on user suggested corrections and behaviour. However this is still easily replicable for google.

Currently grammarly clocks a revenue of ~50 MM / month. At 40 times annual revenue, the product can valued at ~12 billion. Google should acquire given the synergy cited and the headstart in the market.